An attempted antidote to the More Means Worse argument used in higher education

Month: February 2017

I keep returning to an aspect of the UK Government’s approach to immigration: the use of data about ‘bogus colleges’ to demonstrate that there has been abuses of the student visa system. This is done to: (a) demonstrate the energy of the Home Office in dealing with this and (b) to justify additional measures. I have shown, I think, in several blog posts on this topic that the way that government uses an overall number of providers who have been removed from the register is misleading.

In her speech to the Conservative Party Conference on 4 October 2016 Amber Rudd said:

Now, I know that is unlikely. It’s clear that at least 875 providers will have been removed from the register. In October 2015 there were 890 providers on the list of those removed. In October 2014 there were 835 on the list. But the lists provided are of colleges and schools who have at any time been removed, even if they now have a new entry (because they changed name, ownership or returned after a period of suspension) or if they are an entirely reputable provider who has just stopped courses that need a tier 4 visa (schools who no longer take international students or language schools who now only offer shorter courses).

So I asked for another list of the providers who were no longer on the list. I asked for that on 4 October 2016 and was promptly told that the Home Office would respond by 1 November 2016, 20 working days after my FOI request.

On 2 November I reminded the Home Office that they’d said they’d respond by 1 November.

On 15 November I reminded the Home Office, pointing out they were now 10 working days after 1 November.

On 29 November I reminded the Home Office, pointing out they were now 20 working days after 1 November, double the time they should have taken.

On 5 December I asked the Home Office to undertake an internal review of their inability to meet the FOI response time.

On 6 December, the Home Office replied. They regretted they hadn’t met the response time, and assured me that “we are dealing with your request and we will send you a full reply as soon as we can”. They did not say that they’d undertake an internal review.

On 5 January 2017 I again asked the Home Office to undertake an internal review of their inability to meet the FOI response time as it was now three months after my request.

On 6 January, the Home Office replied, with their standard first response letter again, saying that they’d reply within 20 days.

On 13 January, the Home Office replied with their template letter for having conducted an internal review. They said:

I apologise on behalf of the department for the length of time which it is taking to provide you with a substantive response to your request. The policy area has been informed of your concerns and I can confirm that your request is under active consideration and is being treated as a matter of priority.

As of 10 February, we’ve now had 20 working days since an internal review at the Home Office confirmed that they not met the FOI deadline, nor had they informed me that there was any reason why they could not meet the deadline. 20 working days is the standard set for responses to FOI requests, but even with the policy area treating this as a ‘priority’ they haven’t met that deadline. I don’t know how many ‘working days’ the Home Office had over Christmas, but assuming they didn’t come in at all, they’ve now had at least 87 days. I also know that the data they have provided me in the past has simply been a download of the names of providers who have been flagged as being removed from the register. That should be a five minute job. Why hasn’t that been possible in four months?

I’ve now raised this with the Information Commissioner. But why should I need to? Ministers are clearly very proud of the action they took to stop ‘bogus colleges’. In the Committee Stage of the Higher Education and Research Bill, Lord Younger noted that:

I should like to make clear the Government’s position on international students generally. … I make no apology that, when we came to power in 2010, we took steps to rid the system of abuse that was then rife. No one denies now that action needed to be taken then. More than 900 institutions lost the ability to bring in international students.

In October 2016 the Home Secretary said 875 bogus colleges had been stopped by the coalition – now the number stands at over 900. Why won’t they release the names of the providers concerned?

Student housing is a lucrative business. I know that because I get emails from investment companies telling me that it is. They promise high yields on investments; a far cry from the interest offered on bank accounts. Meanwhile sovereign wealth funds are buying up whole developments and portfolios as UK student housing looks like a safe bet. The economics of this are driving companies to compete, mostly by looking to justify ever higher costs, meanwhile something important is being lost.

The current ‘offer’, especially at the ‘luxury’ end of the range, is quite different from that enjoyed by many who went to university in the second half of the twentieth century. Here the norm was for utilitarian facilities, with sharing as the dominant theme. Students shared food, bathrooms, entertainment facilities, even a payphone (few UK students shared bedrooms as their US counterparts did). This wasn’t just an accident; it became the official policy of British Higher Education to encourage a residential life, with students being deliberately mixed together. The shift to a market for accommodation threatens that policy: it separates the residential life from the academic life, it runs the risk of separating students, and it is increasing the cost of higher education (with speculators gaining from that). It’s also a process we’ve been through before – so we should be warned.

From Halls to Studio Living

The student room has transformed in 40 years. The earliest development was away from the catered hall of residence to the self-catered flats. Grouped into flats of differing numbers, this became the new unit of student living. A kitchen/lounge was provided for the group, often at the expense of any social space in the wider hall. These clusters maintained the privacy of the individual study bedroom, but created a new group focus.

This mode of building is still popular; a 175 bed building in Headington was offered for sale at £18,650,000 before building got underway or even planning had been granted (it’s very much still under construction and the company now say they’ll keep it). With an underwriting by Oxford Brookes of 97% of the income for the property and a management agreement in place with a third party company, the investor was promised a net initial yield of 5.75% in the first five years.

A new mode of living is coming up, though. Some student developments started to include a few ‘studio’ flats; a larger unit incorporating the lounge option with a small kitchenette. While universities found themselves with a variety of standards of accommodation (compare the older rooms sharing facilities with the new ensuite rooms) these are now being built into the same developments. Savills are selling Wellgate House in Edinburgh for £6,500,000, a converted building whose 66 rooms are divided between standard and large cluster rooms, standard, large and penthouse studios.

Assuming a 43 week let (Destiny Scotland take care of festival booking in the summer) a student in a standard cluster room would pay £7,740 – which after the operating costs would enable then to gain a net initial yield of 6% (after purchaser costs).

Now whole developments are being created with these studios. An example is Cormorant House – part of a waterfront regeneration scheme in Huddersfield.

Cormorant House

The funding arrangements for this are different, rather than buy the whole building the individual studios are being offered for sale. A canal-facing studio will cost an investor £58,495 and offers a 9% net rental yield. These are being marketed by companies that will also sell you an airport car parking space as an income source. Clearly the largest component that the student is paying for is the combination of capital and investment cost. A young Scottish student in Edinburgh would find that standard cluster room in Wellgate House costs £115 more than their combined bursary & loan, where £5640 is going into the finance of the block.

There’s money to be made here. There are plenty of reports of whole developments being sold, for example in Birmingham, Bournemouth and Cardiff, and Ardent (which has a portfolio of 25 student accommodation buildings) was sold to Singapore’s state investment fund Temasek .

*Update* First, Unite announced that it had bought Aston’s Student Village, with over 3000 rooms working with another Singaporean sovereign wealth fund and the next week it announced that they were selling 4175 rooms spread over 13 properties in order to balance that. Big money is moving around student accommodation.

Why residence matters

Nick Hillman has questioned why we have moved so firmly to a boarding school model of higher education, and I think the answers are mostly historical. The new ‘civic’ universities in the 19th century turned away from the residential university model associated with Oxford and Cambridge for good reasons. The founders of UCL were very clear, living at home would be more affordable and parents could maintain supervision of their children (and therefore attend to their religion and morality). The expense of the older universities was ruinous (and the morality could be too). In their prospectus they worked out how many families lived within a commutable distance to Bloomsbury.

However, one of the main lines of assault on the ‘modern’ universities was that their students did not live the full life of a student in residence. Clearly this was a coded reference to their difference from Oxford and Cambridge, and after the First World War a consensus was reached between the UGC and NUS that this was the preferred model. The only university to get a charter between the wars was Reading, which had committed to a residential mode. The UGC’s 1930 report on universities was clear:

The common life of a residential hall, with the invaluable opportunities it affords for mixing with and learning from students of different tastes and bents of mind is an advantage which we should be glad to see within the reach of as many students as possible. (UGC 1930 p42)

The 1957 Nibblet report confirmed the advantages of the residential model noting that halls had a role of great importance to play in the wider education of students. They noted that fewer students were living at home (in 1934 44% of students lived at home, in 1956 that was 27%), but lodgings were not capable of breaking the model of a ‘nine to five’ mentality – ‘the great enemy of university education’ (UGC 1957 p9). The UGC committed to provide capital funds to build halls for both new universities and expanding civic universities. As halls were designed to bring students together, the UGC adhered to strict specifications – universities were not allowed to build luxury blocks.

It was well known that universities did have luxury blocks of accommodation. Some of our most celebrated collegiate buildings come from a boom in building student accommodation. In the eighteenth century Colleges, which had mainly been founded to support poor students, found that recruiting gentlemen and the nobility was a successful strategy. Although the students were not generally that interested in taking their degrees, they were able to be charged higher fees for both their course and for their board and lodging. In order to attract these richer students, Colleges put up buildings that looked far less like the monastic quarters of their medieval predecessors and much more like the stately homes the students might be coming from. The expense of university living went up, not least as students were expected to provide their own furnishings (including the panelling) – or at least buy it from the previous occupant.

New Building, Magdalen College Oxford

The increase in richer students was matched with a decline in poorer students. Universities recorded the students’ status, and matriculation rolls show a marked falling in the number of plebeians, even those working their way through as servitors (literally being servants to the gentlemen students).

It was this expense that UCL’s founders were trying to avoid. As capital grants gave way to self-financing, universities sensibly opted to band their accommodation by price; why should a student with a bigger room or an en suite bathroom pay the same as someone in a standard room. It is clear the availability of private accommodation has accentuated this (and not just the absurdity of student accommodation on Park Lane). While not every development is aiming at luxury, it is clear that the justification for a higher rent is an increased focus on facilities; gyms, cinemas etc. In some developments, only richer students will be able to afford this, creating our own gated communities in universities. That sense of all students together in a hall will be lost, both as there’s greater physical separation into studios but also on affordability, segmenting our student communities. Meanwhile a large amount of money flows from student maintenance loans into the hands of property developers and institutional investors.

For Harold Silver, these things were interlinked. Before private companies came to dominate, he saw that self-funding (including through PFI) meant that universities were abandoning a tradition of residence, such that universities ‘need no longer see accommodation in an educational context, only as an essential for competitive recruitment’ (Silver, 2007, p99). Outsourcing has led to cost inflation and, while facilities might be as good as they’ve ever been, maybe something important has been lost.

Refs

UGC, 1930, Report including returns from Universities and University Colleges in receipt of Treasury Grant Academic Year 1928-29, London, HMSO

UGC, 1957 Report of the sub-committee on Halls of Residence, London, HMSO